Did your appraisal come in low?

HorseTears · ‎06-29-2020

Did you have to deal with a low appraisal? Were you the seller or buyer? How did you deal with it? Request a second appraisal, protest the first appraisal? Or, did you and the other party just agree to make up the difference? I'd love to hear any first-hand experiences with low appraisals and whether you were able to salvage the deal or not.

Jdman · ‎06-29-2020

We are closing on Thursday. We made an offer for $323k $3k over the asking price of $320k. Our appraisal came in at $316,900. Our realtor when the offer was written she wrote it that we would get the house at the appraised value. When the appraisal came back the builder did not question it It was all the way the contract offer was written for us

JVille · ‎06-29-2020

So why the concern? How "Off" is your appraisal. Typically your RE Agent will negotiate with the seller and get your price reduced. Depends on how low, how ready the seller is to be gone. Transactions typically do not fall apart over the appraisal. Lenders rarely allow changes to the original appraisals unless there are actual errors. Once again that's what your RE Agent is for to provide the Corrections that the appraiser got wrong.

My experience as a UW and LO of nearly 30 yrs is that Deals involving RE Agents do not have a lot of issues with Value but transactions involving FSBO (no agents) have two kinds of issues I saw often. 1) Buyer paid way too much and house does not appraise or 2) Seller is so convinced he does not want to pay for professional help and wants to "Save" that 6% Commission that he has underpriced his home and left significant $$ on the table or he has it so overpriced that it's crazy. Not a fan of FSBO deals as they often fell apart due to a lack of professional assistance.

My two cents? Why are you concerned?

HorseTears · ‎06-29-2020

@JVille wrote:
So why the concern? How "Off" is your appraisal. Typically your RE Agent will negotiate with the seller and get your price reduced. Depends on how low, how ready the seller is to be gone. Transactions typically do not fall apart over the appraisal. Lenders rarely allow changes to the original appraisals unless there are actual errors. Once again that's what your RE Agent is for to provide the Corrections that the appraiser got wrong.
My experience as a UW and LO of nearly 30 yrs is that Deals involving RE Agents do not have a lot of issues with Value but transactions involving FSBO (no agents) have two kinds of issues I saw often. 1) Buyer paid way too much and house does not appraise or 2) Seller is so convinced he does not want to pay for professional help and wants to "Save" that 6% Commission that he has underpriced his home and left significant $$ on the table or he has it so overpriced that it's crazy. Not a fan of FSBO deals as they often fell apart due to a lack of professional assistance.
My two cents? Why are you concerned?

I'm buying a very unique mid century modern house in an area where mid century modern houses rarely go on the market. They're so prized that they stay in the family or the sellers don't even need to put them on the market because they receive unsolicited offers. And when true mid century modern homes do on the market here, they're often in "fixer upper" state.

My seller hasn't had her house appraised since she bought it more than a decade ago and prior to making $150k+ worth of improvements and upgrades while staying true to the mid century modern architectural roots.

There aren't any true apples-to-apples comps. My realtor and several others who've been kind enough to consult (a couple of brokers) all think we should be close on the appraisal, but until that appraisal happens, I'm going to be on tenterhooks.

Anonymous · ‎06-30-2020

@HorseTears wrote:
@JVille wrote:
So why the concern? How "Off" is your appraisal. Typically your RE Agent will negotiate with the seller and get your price reduced. Depends on how low, how ready the seller is to be gone. Transactions typically do not fall apart over the appraisal. Lenders rarely allow changes to the original appraisals unless there are actual errors. Once again that's what your RE Agent is for to provide the Corrections that the appraiser got wrong.
My experience as a UW and LO of nearly 30 yrs is that Deals involving RE Agents do not have a lot of issues with Value but transactions involving FSBO (no agents) have two kinds of issues I saw often. 1) Buyer paid way too much and house does not appraise or 2) Seller is so convinced he does not want to pay for professional help and wants to "Save" that 6% Commission that he has underpriced his home and left significant $$ on the table or he has it so overpriced that it's crazy. Not a fan of FSBO deals as they often fell apart due to a lack of professional assistance.
My two cents? Why are you concerned?
I'm buying a very unique mid century modern house in an area where mid century modern houses rarely go on the market. They're so prized that they stay in the family or the sellers don't even need to put them on the market because they receive unsolicited offers. And when true mid century modern homes do on the market here, they're often in "fixer upper" state.

My seller hasn't had her house appraised since she bought it more than a decade ago and prior to making $150k+ worth of improvements and upgrades while staying true to the mid century modern architectural roots.

There aren't any true apples-to-apples comps. My realtor and several others who've been kind enough to consult (a couple of brokers) all think we should be close on the appraisal, but until that appraisal happens, I'm going to be on tenterhooks.

I am also looking for a mid-century modern home that is true to the style (or leaves money leftover to bring it back to a more original style). Grew up in a similar style home though it had been updated in the early 80s before my mom and step-dad bought it (so it wasn't mid-century on the inside). The area I live in now has few of these home styles and several are in less-than-stellar neighborhoods. The ones in nicer areas only come on the market every now and again.

HorseTears · ‎06-30-2020

@Anonymous wrote:

@HorseTears wrote:
@JVille wrote:
So why the concern? How "Off" is your appraisal. Typically your RE Agent will negotiate with the seller and get your price reduced. Depends on how low, how ready the seller is to be gone. Transactions typically do not fall apart over the appraisal. Lenders rarely allow changes to the original appraisals unless there are actual errors. Once again that's what your RE Agent is for to provide the Corrections that the appraiser got wrong.
My experience as a UW and LO of nearly 30 yrs is that Deals involving RE Agents do not have a lot of issues with Value but transactions involving FSBO (no agents) have two kinds of issues I saw often. 1) Buyer paid way too much and house does not appraise or 2) Seller is so convinced he does not want to pay for professional help and wants to "Save" that 6% Commission that he has underpriced his home and left significant $$ on the table or he has it so overpriced that it's crazy. Not a fan of FSBO deals as they often fell apart due to a lack of professional assistance.
My two cents? Why are you concerned?
I'm buying a very unique mid century modern house in an area where mid century modern houses rarely go on the market. They're so prized that they stay in the family or the sellers don't even need to put them on the market because they receive unsolicited offers. And when true mid century modern homes do on the market here, they're often in "fixer upper" state.

My seller hasn't had her house appraised since she bought it more than a decade ago and prior to making $150k+ worth of improvements and upgrades while staying true to the mid century modern architectural roots.

There aren't any true apples-to-apples comps. My realtor and several others who've been kind enough to consult (a couple of brokers) all think we should be close on the appraisal, but until that appraisal happens, I'm going to be on tenterhooks.
I am also looking for a mid-century modern home that is true to the style (or leaves money leftover to bring it back to a more original style). Grew up in a similar style home though it had been updated in the early 80s before my mom and step-dad bought it (so it wasn't mid-century on the inside). The area I live in now has few of these home styles and several are in less-than-stellar neighborhoods. The ones in nicer areas only come on the market every now and again.

I hear ya. From my experience, persistence is key. While I like my realtor, I had to put a ton of effort in myself. I enjoyed doing so -- I can be a bit of a control freak and I know what I like. I dedicated hours every night to perusing listings (from Flex MLS, to Zillow to even Craigslist), I looked for news articles and historical documents on MCM architecture in the area to learn where there may be a small concentration of these homes. I also browsed "sold" listings from the past few years to get an idea of how many true MCM homes may come on the market in my area -- it was very few! It can be frustrating because so many listings are categorized as "MCM" when they're not -- they may just be homes that were constructed mid-century, but have zero connection to the architectural style and best practices of true MCM design.

I will say, if I hadn't found something in the next month or so, I was going to consider sending unsolicited offers to MCM homeowners in the area. I've since met several folks who own MCM in the area and I've heard that they either acquired their houses that way -- by directly soliciting the prior owners before the homes were even on the market or that they themselves get regularly approached by prospective buyers. It's a bit of a longshot, but if you're willing to put the work into researching, it might be worth considering. I hope you land the MCM house of your dreams!

Anonymous · ‎06-30-2020

My issue is that I want one of the smaller MCM homes. I have no use for a larger home...no kids. The smaller MCM homes are even harder to come by and many of them are in bad neighborhoods. I live in a nice apartment but my MCM furniture doesn't fit the style. I really dislike all the 'pottery barn'-esque things that people have done to many of the MCM homes. Talk about boring *yawn* I especially like the homes that have the all wood ceilings. It is such a crime when someone has painted them white!

Anonymous · ‎06-30-2020

Post some pics of the house after you buy so I can salivate😁

HorseTears · ‎06-30-2020

@Anonymous wrote:
My issue is that I want one of the smaller MCM homes. I have no use for a larger home...no kids. The smaller MCM homes are even harder to come by and many of them are in bad neighborhoods. I live in a nice apartment but my MCM furniture doesn't fit the style. I really dislike all the 'pottery barn'-esque things that people have done to many of the MCM homes. Talk about boring *yawn* I especially like the homes that have the all wood ceilings. It is such a crime when someone has painted them white!

Very similar situation. I'm single, no kids. First-time homebuyer. I'd honestly be happy with a 2BR, but I know that 3BR have better resale value. I found a 3BR, 2 1/2 BA MCM home. Atomic ranch style -- one level. Because it's one level and because the main living areas embrace the open floor plan style, the 2000 sq feet surprisingly doesn't feel at all too big for a single person. I'll plan to use one BR as a guest BR and the other as a home office/storage room.

Anonymous · ‎06-30-2020

Our situations do seem similar. I am also single and first time home buyer. I saw one larger MCM home that I liked but it was at the upper end of my budget and needed updating as the interior had to have been remodeled in the 90s. Didn't fit the style of the home at all. I was also worried about the price. Due to the size, it seemed too cheap...made me worried that there were issues with the house that weren't being disclosed.